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KIERAN GILBERT: First to this extraordinary war between Peter Dutton, the Home Affairs Minister and the former head of Border Force. Peter Dutton launching an extraordinary attack on the former Border Force Commissioner, over claims that Roman Quaedvlieg made about Minister Dutton’s intervention in visa matters. The Home Affairs Minister says allegations his chief of staff contacted Mr Quaedvlieg to sort out a visa issue on behalf of a friend are fabricated. Mr Dutton says the staffer in question Craig Maclachlan didn’t even work in his office at the time of the alleged phone call and Mr Quaedvlieg didn’t start as Commissioner until the following month. Mr Quaedvlieg’s assertions came in the form of a letter to a Senate inquiry looking into the visa issue which the Minister has labelled a smear campaign. Mr Quaedvlieg says he stands by his recollection of events. Let’s go live to the Leader of the Government in the Senate and Finance Minister Mathias Cormann. Thanks for your time. And as I say, it is quite some row. The Australian calls it the border wars. But the rebuttal by Peter Dutton even questions the mental health of Roman Quaedvlieg, is that appropriate?

MATHIAS CORMANN: I am not going to go into the ins and outs of their exchanges, except to say that Mr Quaedvlieg made very serious allegations against Peter Dutton and on a factual basis they just do not stack up. Peter Dutton quite rightly pointed out some major factual inaccuracies in what was alleged, as he categorically denied any of the allegations made by Mr Quaedvlieg.

KIERAN GILBERT: The Greens and Labor will be moving a motion of no confidence against the Home Affairs Minister next week in relation to his assertion that he didn’t have any link to those seeking interventions in terms of these au pairs. That was proven wrong.

MATHIAS CORMANN: That is not right. Mr Quaedvlieg is not a credible witness here. He makes these allegations on the basis of conversations that clearly could not have taken place. Principally because the staff member with whom he alleges he had the conversation did not work for Mr Dutton until some time later. Mr Quaedvlieg himself did not work in the position at the material time. The Labor Party and the Greens will do what they do. They have never liked Peter Dutton on political grounds. They do not like how effective he has been in protecting our borders. We just expect that from Labor and the Greens. Mr Quaedvlieg is generally unhappy about the circumstances in which he lost his position. That all has to be taken into account when assessing the allegations that are now made, but that have clearly material factual errors in them.

KIERAN GILBERT: Minister you were with the Prime Minister Scott Morrison yesterday in Albury for that speech, that speech that he gave, ad-libbed basically thirty minutes or so. What was it all about?

MATHIAS CORMANN: It was a great speech. It was a speech to bring the party together around the values and principles that underpin our policy agenda as a Government. The timeless values of committing ourselves to promoting individual freedom, free enterprise, reward for effort, encouraging people to stretch themselves. Because, over decades now, the evidence around the world and in Australia is that governments which implement policy agendas based on the values promoted by Robert Menzies deliver better outcomes for individuals, their families and the communities they live in. I thought it was a very good speech. It was a very important speech. It is a time when we need to bring the party back together. We need to bring the country back together. We are facing a directional battle in Australia in the lead up to the next election. It is very important for us to explain very clearly why our values, the values of promoting individual freedom and reward for effort, encouraging people to stretch themselves, a social safety net, better enable Australians today and into the future to get ahead and have the best possible life here in Australia.

KIERAN GILBERT: So about values, but also as you know about the optics isn’t it? A charm offensive. He was at the AFL having a beer last night with Dan Tehan. Wanting to show himself as the everyday man, isn’t he?

MATHIAS CORMANN: I think the Prime Minister is being himself. He is in a position now where he can show a different side of himself, where he can genuinely engage with the Australian people in a different way than he could in his previous roles. I think what Australians can see is what they will get. He is authentic. He has strong values underpinning his policy convictions. I think Australians like what they see.

KIERAN GILBERT: Do you regret any of your role in the upheaval that the Liberal party had a couple of weeks ago?

MATHIAS CORMANN: Kieran, it would have been much easier for me to sit on the sidelines and do nothing. I did not bring the events about. I would rather if Malcolm had not taken the party room by surprise by initiating a leadership ballot. I would rather if the result had not been what it had been. But once the events unfolded the way they did, I stand by my judgement that the leadership of the Liberal party had to be properly resolved before we left Canberra. We would have had debilitating uncertainty, instability and would have got ourselves into an irretrievable position if we had let this run for weeks on end. It was extremely uncomfortable. It was a very difficult decision. The party made the decision in relation to the leadership. We are now all working very hard as part of the team supporting Scott Morrison and Josh Frydenberg to take our Government forward, to take our country forward.

KIERAN GILBERT: Okay and there have been some suggestions that it was pre-meditated by you and worked in cahoots with Peter Dutton. You reject that? You were loyal to Mr Turnbull until that final week?

MATHIAS CORMANN: Absolutely. There have been a lot of inaccurate allegations and assertions made. That is par for the course when you go through difficult weeks like this. It was not me who brought on the leadership ballot on Tuesday. I was taken by surprise by the leadership ballot. I could not ignore reality the next day, when a number of colleagues who had voted for Mr Turnbull based on Cabinet solidarity requirements, told me that if it was not for that they would have actually rather voted for change, I could not ignore the fact that a number of Ministers had voted against the Prime Minister at the time and offered their resignations. The whole situation was clearly very messy. It had to be resolved before we left. It had to be resolved properly. I wish I did not have to play a role in helping to resolve it. But I was in a unique position where I had to take responsibility for the Government, for the Party. We are where we are.

KIERAN GILBERT: And just quickly, finally on this issue, I want to talk about the GDP and other matters, the ABC reports some of the Dutton camp, in terms of their intimidation of other MPs would stay in other offices, go to other MPs offices and stay there until they signed that petition. Did you hear any of that?

MATHIAS CORMANN: No I have not. I have seen the report this morning coming through. I did not myself walk to any colleagues’ offices. A number of colleagues came to see me in my office. That was their decision. I am strongly of the view that colleagues should always treat each other with courtesy and respect. We are in a Parliamentary democracy where it is quite appropriate, indeed it is important for us to exchange views about the policy direction, the personnel, seek to convince each other of the merits of our argument. There is nothing wrong with seeking to convince each other of the merits of our arguments, but it always ought to be done with courtesy and respect. I should say that the unusual requirement for a public show of hands by a majority of our party room did put a lot of colleagues under pressure. Previous party room meetings of this nature were called on the basis of either two signatures or because of somebody wanting to challenge requesting a meeting. To require a public show of hands from 43 colleagues, a majority of the Liberal Party party room inevitably put a lot of pressure on colleagues in order to be able to facilitate the resolution of the leadership of the Liberal Party.

KIERAN GILBERT: Minister, the GDP figures out this week, strong growth 3.4 per cent year on year, but for some reason there is a disconnect as Jim Chalmers puts it between GDP and the stagnant wage growth. Why is that? Can you do something about it?

MATHIAS CORMANN: Wages are higher than they would be if growth was weaker. When we came into Government we inherited a weakening economy from the Labor Party. We inherited rising unemployment from the Labor Party. When unemployment goes up, competition for workers reduces, that is a key driver of lower wages. What has been happening now, as we see stronger economic growth and in particular stronger employment growth over an extended period and the excess supply in the labour market starts to reduce further - we have an unemployment rate now down to 5.3 per cent…interrupted

KIERAN GILBERT: The wages will go up.

MATHIAS CORMANN: … well below where it was anticipated it would be, wages over time are expected to go up. That is not just our view. That is also the view of the Reserve Bank Governor. That is the orthodox view of how wages evolve over time.

KIERAN GILBERT: Company profits are much larger in terms of their growth than wages, is it important that companies start to pass that on. To see this as their responsibility.

MATHIAS CORMANN: In the end as the economy continues to grow as more jobs are being created, as competition for workers continues to increase, as the excess supply of labour in the labour market continues to go down, business will be forced to pay more to secure the services of Australians around Australia. That is the way the free market works. I know that under Bill Shorten they no longer believe in the free market and the way that it has delivered prosperity for Australians over generations. They now believe that the best way to create jobs is to run businesses down and to run on an anti-business, higher taxes agenda. Let me tell you if Bill Shorten was elected on his anti-business, higher taxing agenda it will lead to less investment, lower growth, fewer jobs and higher unemployment. As unemployment goes up as it did under Labor last time, wages will go down. Under the Coalition, our plan, which is delivering stronger growth and more jobs and lower unemployment, wages will go up into the future. That is the way the free market has operated for a very long time.

KIERAN GILBERT: Okay, and in terms of the growth, the economic growth we have seen in the context of the fiscal rules that you’ve enforced as Finance Minister does this give you now more headroom, more room to move when it comes to expediting the reduction in the company tax rate for businesses with a turnovers of up to $50 million a year?

MATHIAS CORMANN: A couple of things, firstly because employment growth has been higher than anticipated, has been stronger than anticipated, we are collecting more in personal income tax revenue than was anticipated and we are spending less on welfare. So that is good for the Budget. That is one of the benefits, the flow on fiscal dividend, of stronger economic growth and stronger employment growth. That is why we are able to, among other things, make additional investments into cancer treating drugs on the PBS and various other life saving drugs on the PBS. You have to remember, when Labor had completely lost control of the Budget during their last period in government, when Bill Shorten was part of the Gillard and Rudd governments, they had stopped the automatic listing of a whole range of very important drugs because they could not, they simply could not afford it. If you have a stronger economy, if you create more jobs, the personal income tax revenue goes up, your welfare payments go down, the proportion of the working age population on welfare today is the lowest it has been in twenty-five years, it is a huge achievement of the Abbott and Turnbull government periods in government. It is one that the Morrison Government will continue to build on into the future.

KIERAN GILBERT: And very quickly, in terms of Bill Shorten’s call for extending the banking Royal Commission, do you think that that should be considered to allow the Commissioner and others as part of that to go to regional areas?

MATHIAS CORMANN: The Government has been on the record for some time that we will take the advice of the Royal Commissioner. The Royal Commissioner is doing an exceptional job. If he gives advice to the Government that in his judgement the Royal Commission needs to be extended, as we have said for some time now, we would act on that advice. But we respect the job that the Royal Commissioner is doing. We respect his independence. We look forward to what he has to say to us in relation to that.

KIERAN GILBERT: Finance Minister, Leader of the Government in the Senate, Senator Cormann we will talk to you next week.

MATHIAS CORMANN: Always good to talk to you.

[ENDS]

Senator the Hon Mathias Cormann, Minister for Finance and the Public Service, Perth